Business

Deere restructuring is a 'natural progression': analyst

Shift aimed at integrating smart technology

A farmer dumps his load of corn into a semi trailer while harvesting in Scott County. (Quad-City Times)
A farmer dumps his load of corn into a semi trailer while harvesting in Scott County. (Quad-City Times)

Deere and Co. Wednesday announced a new operating model company officials say will help it integrate smart technology with the manufacturer’s legacy of manufacturing excellence.

“The new operating model will help us respond to changing market conditions with greater speed and efficiency,” Deere Chairman and CEO John May said in a news release.

Deere is headquartered in Moline, Ill.

The Deere Smart Industrial strategy is designed to help customers become more profitable and sustainable, while also revolutionizing the agriculture and construction industries through the rapid introduction of new technologies, the release said.

Actions will be concentrated on the following areas:

• Production systems — A strategic alignment of products and solutions around Production Systems road maps, which capitalizes on Deere’s knowledge of its customers and how they work.

The new structure enables the company to drive an integrated product road map and related investments that span all aspects of a customer’s jobs and to more fully meet customer needs.

• Technology stack — Investments in technology, research and development that deliver intelligent solutions to Deere customers through a combination of hardware, embedded software, connectivity, data platforms and applications.

Deere’s offerings of “smart” machines, systems and solutions enhances precision, automation, speed and efficiency to a level not previously possible, the company said.

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• Lifecycle solutions — Deere’s aftermarket and support capabilities will be integrated to more effectively manage customer equipment, service and technology needs across the lifetime of a John Deere product, and with a specific lifecycle solution focused on ownership experience, it said.

“The new operating model represents a leap forward in performance for the company from an already strong starting point,” May said.

Mark Grywacheski, investor adviser with the Quad Cities Investment Group, called the move a natural progression and evolution.

“It is a restructuring to capitalize and maximize their strength in using this smart technology,” Grywacheski said, “because it is a way that Deere differentiates its products.

“And then the marketing driving sales and revenues. This is just a natural progression, trying to maximize their profits and revenues, rather than something that’s COVID-19-related or the U.S.-China trade dispute related.”

Jenn Hartmann, Deere spokeswoman, said it’s too early to say if it will affect personnel numbers.

“Right now, this is focused at the corporate level,” Hartmann said. “... We are in a world now where technology and industry trends are changing so fast. We need to be better equipped to respond to those shifts quickly and position Deere for our future.”

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